the makers of inferior goods. An English law passed in 1266 required bakers to put their mark on every loaf of bread sold,
“to the end that if any bread bu faultie in weight, it may bee then knowne in whom the fault is.” Goldsmiths and silversmiths were also required to mark their goods, both with their signa- ture or personal symbol and with a sign of the quality of the metal. In 1597, two goldsmiths convicted of putting false marks on their wares were nailed to the pillory by their ears. Similarly harsh punishments were decreed for those who counterfeited other artisans’ marks.
When Europeans began to settle in North America, they brought the convention and practice of branding with them. The makers of patent medicines and tobacco manufacturers were early U.S. branding pioneers. Medicine potions such as Swaim’s Panacea, Fahnestock’s Vermifuge, and Perry Davis’ Vegetable Pain Killer became well known to the public prior to the Ameri- can Civil War. Patent medicines were packaged in small bottles and, because they were not seen as a necessity, were vigorously promoted. To further influence consumer choices in stores, man- ufacturers of these medicines printed elaborate and distinctive labels, often with their own portrait featured in the center.
Tobacco manufacturers had been exporting their crop since the early 1600s. By the early 1800s, manufacturers had packed bales of tobacco under labels such as Smith’s Plug and Brown and Black’s Twist. During the 1850s, many tobacco manufactur- ers recognized that more creative names—such as Cantaloupe, Rock Candy, Wedding Cake, and Lone Jack—were helpful in selling their tobacco products. In the 1860s, tobacco manufactur- ers began to sell their wares in small bags directly to consumers.
Attractive-looking packages were seen as important, and picture labels, decorations, and symbols were designed as a result.
Emergence of National Manufacturer Brands:
1860 to 1914
In the United States after the American Civil War, a number of forces combined to make widely distributed, manufacturer- branded products a profitable venture:
• Improvements in transportation (e.g., railroads) and commu- nication (e.g., telegraph and telephone) made regional and even national distribution increasingly easy.
• Improvements in production processes made it pos- sible to produce large quantities of high-quality products inexpensively.
• Improvements in packaging made individual (as opposed to bulk) packages that could be identified with the manufac- turer’s trademark increasingly viable.
• Changes in U.S. trademark law in 1879, the 1880s, and 1906 made it easier to protect brand identities.
• Advertising became perceived as a more credible option, and newspapers and magazines eagerly sought out advertising revenues.
• Retail institutions such as department and variety stores and national mail order houses served as effective middlemen and encouraged consumer spending.
• The population increased due to liberal immigration policies.
• Increasing industrialization and urbanization raised the stan- dard of living and aspirations of Americans, although many products on the market still were of uneven quality.
• Literacy rose as the percentage of illiterate Americans dropped from 20 percent in 1870 to 10 percent in 1900.
All these factors facilitated the development of consistent- quality consumer products that could be efficiently sold to con- sumers through mass market advertising campaigns. In this fertile branding environment, mass-produced merchandise in packages largely replaced locally produced merchandise sold from bulk containers. This change brought about the wide- spread use of trademarks. For example, Procter & Gamble made candles in Cincinnati and shipped them to merchants in other cities along the Ohio and Mississippi rivers. In 1851, wharf hands began to brand crates of Procter & Gamble candles with a crude star. The firm soon noticed that buyers downriver relied on the star as a mark of quality, and merchants refused the can- dles if the crates arrived without the mark. As a result, the can- dles were marked with a more formal star label on all packages, branded as “Star,” and began to develop a loyal following.
The development and management of these brands was largely driven by the owners of the firm and their top-level man- agement. For example, the first president of National Biscuit was involved heavily in the introduction in 1898 of Uneeda Biscuits, the first nationally branded biscuit. One of their first decisions was to create a pictorial symbol for the brand, the Uneeda biscuit slicker boy, who appeared in the supporting ad campaigns. H.
J. Heinz built up the Heinz brand name through production in- novations and spectacular promotions. Coca-Cola became a national powerhouse due to the efforts of Asa Candler, who ac- tively oversaw the growth of the extensive distribution channel.
National manufacturers sometimes had to overcome re- sistance from consumers, retailers, wholesalers, and even employees from within their own company. To do so, these firms employed sustained “push” and “pull” efforts to keep both consumers and retailers happy and accepting of national brands. Consumers were attracted through the use of sampling, premiums, product education brochures, and heavy advertising.
Retailers were lured by in-store sampling and promotional pro- grams and shelf maintenance assistance.
As the use of brand names and trademarks spread, so did the practice of imitation and counterfeiting. Although the laws were somewhat unclear, more and more firms sought protection by sending their trademarks and labels to district courts for regis- tration. Congress finally separated the registration of trademarks and labels in 1870 with the enactment of the country’s first fed- eral trademark law. Under the law, registrants were required to send a facsimile of their mark with a description of the type of goods on which it was used to the Patent Office in Washing- ton along with a $25 fee. One of the first marks submitted to the Patent Office under the new law was the Underwood Devil, which was registered to William Underwood & Company of Bos- ton on November 29, 1870 for use on “Deviled Entremets.” By 1890, most countries had trademark acts, establishing brand names, labels, and designs as legally protectable assets.
Dominance of Mass Marketed Brands:
1915 to 1929
By 1915, manufacturer brands had become well established in the United States on both a regional and national basis. The next 15 years saw increasing acceptance and even admiration of manufacturer brands by consumers. The marketing of brands became more specialized under the guidance of functional ex- perts in charge of production, promotion, personal selling, and other areas. This greater specialization led to more advanced marketing techniques. Design professionals were enlisted to as- sist in the process of trademark selection. Personal selling be- came more sophisticated as salesmen were carefully selected
and trained to systematically handle accounts and seek out new businesses. Advertising combined more powerful creativity with more persuasive copy and slogans. Government and indus- try regulation came into place to reduce deceptive advertising.
Marketing research became more important and influential in supporting marketing decisions.
Although functional management of brands had these vir- tues, it also presented problems. Because responsibility for any one brand was divided among two or more functional managers—
as well as advertising specialists—poor coordination was always a potential problem. For example, the introduction of Wheaties cereal by General Mills was nearly sabotaged by the company’s salesmen, who were reluctant to take on new duties to sup- port the brand. Three years after the cereal’s introduction and on the verge of its being dropped, a manager from the advertis- ing department at General Mills decided to become a product champion for Wheaties, and the brand went on to great success in the following decades.
Challenges to Manufacturer Brands:
1930 to 1945
The onset of the Great Depression in 1929 posed new challenges to manufacturer brands. Greater price sensitivity swung the pen- dulum of power in the favor of retailers who pushed their own brands and dropped nonperforming manufacturer brands. Ad- vertising came under fire as manipulative, deceptive, and taste- less and was increasingly being ignored by certain segments of the population. In 1938, the Wheeler Amendment gave power to the Federal Trade Commission (FTC) to regulate advertising practices. In response to these trends, manufacturers’ advertis- ing went beyond slogans and jingles to give consumers specific reasons why they should buy advertised products.
There were few dramatic changes in marketing of brands during this time. As a notable exception, Procter & Gamble put the first brand management system into place, whereby each of their brands had a manager assigned only to that brand who was responsible for its financial success. Other firms were slow to follow, however, and relied more on their long-standing reputation for good quality—and a lack of com- petition—to sustain sales. During World War II, manufacturer brands became relatively scarce as resources were diverted to the war effort. Nevertheless, many brands continued to advertise and helped bolster consumer demand during these tough times.
The Lanham Act of 1946 permitted federal registration of service marks (marks used to designate services rather than products) and collective marks such as union labels and club emblems.
Establishment of Brand Management Standards:
1946 to 1985
After World War II, the pent-up demand for high-quality brands led to an explosion of sales. Personal income grew as the economy took off, and market demand intensified as the rate of population growth exploded. Demand for national brands soared, fueled by a burst of new products and a receptive and growing middle class. Firm after firm during this time period ad- opted the brand management system.
In the brand management system, a brand manager took
“ownership” of a brand. A brand manager was responsible for developing and implementing the annual marketing plan for his or her brand, as well as identifying new business opportunities.
The brand manager might be assisted, internally, by representa- tives from manufacturing, the sales force, marketing research, fi- nancial planning, research and development, personnel, legal, and public relations and, externally, by representatives from advertising agencies, research suppliers, and public relations agencies.
Then, as now, a successful brand manager had to be a ver- satile jack-of-all-trades. The skills that began to be required then have only become more important now, including:
• Marketing fundamentals
• Cultural insights to understand the diversity of consumers
• IT and Web skills to guide digital activities
• Technical sophistication to appreciate new research methods and models
• Design fluency to work with design techniques and designers
• Creativity to devise holistic solutions
Branding Becomes More Pervasive: 1986 to Now
The merger and acquisitions boom of the mid-1980s raised the interest of top executives and other board members as to the financial value of brands. With this realization came an appre- ciation of the importance of managing brands as valuable in- tangible assets. At the same time, more different types of firms began to see the advantages of having a strong brand and the corresponding disadvantages of having a weak brand.
The last 25 years have seen an explosion in the interest and application of branding as more firms have embraced the con- cept. As more and more different kinds of products are sold or promoted directly to consumers, the adoption of modern mar- keting practices and branding has spread further. Consider the pharmaceutical industry.
THE PHARMACEUTICAL INDUSTRY
In the United States, prescription drugs are increasingly be- ing branded and sold to consumers with traditional mar- keting tactics such as advertising and promotion. Direct- to-consumer advertising for prescription drugs also grew from $242 million in 1994 to $4.2 billion in 2010. In 2009, Pfizer spent over $1 billion in direct-to-consumer adver- tising. Much of this effort is focused on what we might call “disease branding,” in which marketers shape public impressions of a medical malady to make treating it more attractive to potential patients. Panic disorder, reflux dis- ease, erectile dysfunction, and restless legs syndrome were all relatively obscure to the public until they were given a specific name and meaning by drug companies. By high- lighting and destigmatizing medical conditions, disease branding increases demand for the drugs being sold for treatment. When Pharmacia launched Detrol, it labeled what physicians had been calling “urge incontinence” as an “overactive bladder,” a much more vigorous-sounding condition. Millions of prescriptions followed. Some phar- maceutical companies, however, are cutting back on direct- to-consumer advertising in light of the lower number of new-drug introductions and increasing government scru- tiny of the practice. They are selective in deciding which brands to market directly to consumers; of over 2,000 drugs recently studied, only 100 were targeted via advertis- ing to consumers.43
always seem to understand how branding works or apply branding concepts correctly. For branding success, an apprecia- tion of and aptitude for using appropriate branding concepts—
a focus of this book—is critical.